Brewers tap Capitol Hill for small-business support

By Gary GlancyTimes-News correspondent

Published: Sunday, March 31, 2013 at 4:30 a.m.

Last Modified: Saturday, March 30, 2013 at 10:47 p.m.

WASHINGTON, D.C. – Leaders from the surging craft beer community made a huge presence in the nation’s capital last week, with the industry’s largest-ever conference and trade show serving as a springboard to gaining legislative and overall support from federal lawmakers.

Representatives from Sierra Nevada Brewing Co., Oskar Blues Brewery and several other Western North Carolina beer companies were among the nearly 6,500 attendees of the annual Craft Brewers Conference and BrewExpo America at the Walter E. Washington Convention Center.

From a welcome reception Tuesday that spanned both floors of the Smithsonian National Air and Space Museum to nightly beer events at dozens of bars and restaurants across the city, the takeover of Washington was indicative of craft beer’s momentum nationwide as the industry saw double-digit growth for the third consecutive year with a 15 percent jump in production in 2012.

“Craft brewers have turned the beer world upside down, where the largest brewers in the country are learning from the smallest and newest brewers out there,” Paul Gatza, director of the Brewers Association trade group, said in front of a packed ballroom of industry professionals Wednesday at the convention center.

“Mega-brands are not doing very well; seven of the eight top brands of beer in the U.S. in sales are losing share right now.”

According to the Brewers Association, in 2012 there were 409 new brewery openings – the most since just after Prohibition was repealed – bringing the total number of breweries operating during the year to 2,347, with another 1,254 in planning.

Gatza said microbreweries continue to slowly nibble away at U.S. beer market share that’s been dominated for decades by brewing giants such as Anheuser-Busch/InBev and MillerCoors.

“It’s happening everywhere,” Gatza said. “It’s happening in urban areas, it’s happening in suburban areas, it’s happening in rural areas. So breweries are touching communities all over the place. The American public is clearly responding to the options that are out there on the small side.”

Growth means jobs

With that growth come jobs, a point the industry is striving to hammer home to members of Congress.

On Tuesday, Sierra Nevada owner Ken Grossman and his son, Brian, who will co-manage the company’s brewery in Mills River, joined more than 230 other craft brewers on a “Hill Climb” to Capitol Hill, where they met with representatives from nearly 350 congressional offices.

The main goal of the visit, Brewers Association COO Bob Pease said during a news conference Wednesday, was to develop relationships with those offices, and “tell the story of American craft beer and educate the staff about the challenges of running a small business and small brewery.”

Another major function of the Hill Climb for the brewing contingent was to generate as much support as possible for the Small Brewer Reinvestment and Expanding Workforce Act, a bill introduced in the House in February by U.S. Rep. Jim Gerlach, R-Pa., along with U.S. Rep Richard Neal, D-Mass, both members of the Ways and Means Committee.

The legislation would slash the current federal excise tax rate on beer in half, from $7 to $3.50 per barrel on the first 60,000 barrels of production (a barrel is equal to about 31 gallons), and microbreweries would also get a $2-per barrel tax cut for beer production between 60,000 and 2 million barrels per year, from $18 to $16.

That would have huge implications for Sierra Nevada – the country’s second-largest craft brewer – which plans to produce about 350,000 barrels of beer at its Mills River plant in 2014 and eventually up to 750,000 barrels a year in Phase 2 of the operation.

The bill also re-defines small breweries as those producing less than 6 million barrels per year versus the current mark of 2 million barrels, which has been in place since 1976, Pease said.

He added that the Brewers Association and its members spent last week trying to recruit more co-sponsors of the bill – there are currently 61, 12 of whom are members of Ways and Means; getting a Senate companion bill introduced, as Pease said U.S. Sen. Ben Cardin, D-Md., will do when Congress returns from its Easter recess; and to work with supporters in the House and Senate on getting the bill’s provisions attached to something larger.

“Our bill is so small in terms of the lost revenue to the federal government that it would never be voted on as a stand-alone measure,” Pease said. “The bill has generated wide, broad, bi-partisan support, but we need a larger tax or job-creation piece of legislation to where our (provisions) can get inserted into that. One potential vehicle might be comprehensive tax reform, which there’s a lot of chatter about in D.C. right now … (it) was last done in 1986, and it is a massive, massive undertaking. Both sides agree that the tax code is way too complex and there needs to be some changes made to it, but we’re going to keep working with our champions and just try to educate members of both the House and Senate why we think this is good public policy.”

The Brewers Association also is seeking to boost membership in both the House and Senate Small Brewers Caucus. The House version, now 115 members strong, is co-chaired by Gerlach and U.S. Rep. Peter DeFazio, D-Ore., while Republican Congressman Patrick McHenry of North Carolina’s 10th District serves as one of the vice-chairmen.

After receiving the Brewers Association’s Leadership Award during the conference’s keynote session last week, DeFazio called the BREW Act a “great bill” that would create at least 5,000 jobs in the first year, and that it’s gaining more and more support in Congress.

“Craft beer, and those of you who make and love it, can help fix Congress and save America – that’s why you’re all here in D.C. this week,” DeFazio, a longtime homebrewer and beer judge, said to laughter from the audience. “Think about it: The only bi-partisan thing I can think of going on in Capitol Hill is the craft brewers caucus – 115 members, almost equally divided between Democrats and Republicans, and growing. Think of what the craft beer industry can provide as an example to Congress: You know how to create jobs – something we’ve got to figure out how to do around here with the country. You know how to balance the books; boy, if we sure could figure that out. And, unlike Congress, you produce a product that Americans like.”

<p>WASHINGTON, D.C. – Leaders from the surging craft beer community made a huge presence in the nation's capital last week, with the industry's largest-ever conference and trade show serving as a springboard to gaining legislative and overall support from federal lawmakers.</p><p>Representatives from Sierra Nevada Brewing Co., Oskar Blues Brewery and several other Western North Carolina beer companies were among the nearly 6,500 attendees of the annual Craft Brewers Conference and BrewExpo America at the Walter E. Washington Convention Center.</p><p>From a welcome reception Tuesday that spanned both floors of the Smithsonian National Air and Space Museum to nightly beer events at dozens of bars and restaurants across the city, the takeover of Washington was indicative of craft beer's momentum nationwide as the industry saw double-digit growth for the third consecutive year with a 15 percent jump in production in 2012.</p><p>“Craft brewers have turned the beer world upside down, where the largest brewers in the country are learning from the smallest and newest brewers out there,” Paul Gatza, director of the Brewers Association trade group, said in front of a packed ballroom of industry professionals Wednesday at the convention center.</p><p>“Mega-brands are not doing very well; seven of the eight top brands of beer in the U.S. in sales are losing share right now.”</p><p>According to the Brewers Association, in 2012 there were 409 new brewery openings – the most since just after Prohibition was repealed – bringing the total number of breweries operating during the year to 2,347, with another 1,254 in planning.</p><p>Gatza said microbreweries continue to slowly nibble away at U.S. beer market share that's been dominated for decades by brewing giants such as Anheuser-Busch/InBev and MillerCoors.</p><p>“It's happening everywhere,” Gatza said. “It's happening in urban areas, it's happening in suburban areas, it's happening in rural areas. So breweries are touching communities all over the place. The American public is clearly responding to the options that are out there on the small side.”</p><p></p><p><b>Growth means jobs </b></p><p></p><p>With that growth come jobs, a point the industry is striving to hammer home to members of Congress.</p><p>On Tuesday, Sierra Nevada owner Ken Grossman and his son, Brian, who will co-manage the company's brewery in Mills River, joined more than 230 other craft brewers on a “Hill Climb” to Capitol Hill, where they met with representatives from nearly 350 congressional offices.</p><p>The main goal of the visit, Brewers Association COO Bob Pease said during a news conference Wednesday, was to develop relationships with those offices, and “tell the story of American craft beer and educate the staff about the challenges of running a small business and small brewery.”</p><p>Another major function of the Hill Climb for the brewing contingent was to generate as much support as possible for the Small Brewer Reinvestment and Expanding Workforce Act, a bill introduced in the House in February by U.S. Rep. Jim Gerlach, R-Pa., along with U.S. Rep Richard Neal, D-Mass, both members of the Ways and Means Committee.</p><p>The legislation would slash the current federal excise tax rate on beer in half, from $7 to $3.50 per barrel on the first 60,000 barrels of production (a barrel is equal to about 31 gallons), and microbreweries would also get a $2-per barrel tax cut for beer production between 60,000 and 2 million barrels per year, from $18 to $16.</p><p>That would have huge implications for Sierra Nevada – the country's second-largest craft brewer – which plans to produce about 350,000 barrels of beer at its Mills River plant in 2014 and eventually up to 750,000 barrels a year in Phase 2 of the operation.</p><p>The bill also re-defines small breweries as those producing less than 6 million barrels per year versus the current mark of 2 million barrels, which has been in place since 1976, Pease said.</p><p>He added that the Brewers Association and its members spent last week trying to recruit more co-sponsors of the bill – there are currently 61, 12 of whom are members of Ways and Means; getting a Senate companion bill introduced, as Pease said U.S. Sen. Ben Cardin, D-Md., will do when Congress returns from its Easter recess; and to work with supporters in the House and Senate on getting the bill's provisions attached to something larger.</p><p>“Our bill is so small in terms of the lost revenue to the federal government that it would never be voted on as a stand-alone measure,” Pease said. “The bill has generated wide, broad, bi-partisan support, but we need a larger tax or job-creation piece of legislation to where our (provisions) can get inserted into that. One potential vehicle might be comprehensive tax reform, which there's a lot of chatter about in D.C. right now … (it) was last done in 1986, and it is a massive, massive undertaking. Both sides agree that the tax code is way too complex and there needs to be some changes made to it, but we're going to keep working with our champions and just try to educate members of both the House and Senate why we think this is good public policy.”</p><p>The Brewers Association also is seeking to boost membership in both the House and Senate Small Brewers Caucus. The House version, now 115 members strong, is co-chaired by Gerlach and U.S. Rep. Peter DeFazio, D-Ore., while Republican Congressman Patrick McHenry of North Carolina's 10th District serves as one of the vice-chairmen.</p><p>After receiving the Brewers Association's Leadership Award during the conference's keynote session last week, DeFazio called the BREW Act a “great bill” that would create at least 5,000 jobs in the first year, and that it's gaining more and more support in Congress.</p><p>“Craft beer, and those of you who make and love it, can help fix Congress and save America – that's why you're all here in D.C. this week,” DeFazio, a longtime homebrewer and beer judge, said to laughter from the audience. “Think about it: The only bi-partisan thing I can think of going on in Capitol Hill is the craft brewers caucus – 115 members, almost equally divided between Democrats and Republicans, and growing. Think of what the craft beer industry can provide as an example to Congress: You know how to create jobs – something we've got to figure out how to do around here with the country. You know how to balance the books; boy, if we sure could figure that out. And, unlike Congress, you produce a product that Americans like.”</p>